George and his family own life-insurance contracts issued in the
1990s. These so-called cours connu, or known-price, arbitrage
contracts are unbelievably generous. That's because George
can switch his investments based on their closing prices during
the previous week. So if one of his investments
does badly in any given week, it's not a problem. He can just
switch it next week and get last week's prices.

The contracts were originally issued by L'Abeille Vie, a defunct
French insurance company that became Aviva in 2002. Since then,
Aviva has tried in court to change the terms of the contract.
However, both the French High Court and the Supreme Court ruled
in favour of George's
position last year.

At least 30 people are in litigation with Aviva, George said,
adding that thousands of other contracts could be floating
around.

It would be a colossal headache for Aviva if the cases were to
continue to be upheld.

The French High Court confirmed last year that George's funds had
an implied growth rate of 68%, based on returns from 1997 to
2007.

If continued, the fund would explode in value, rising to billions
of euros and eventually swelling to be worth more than Aviva.

Business Insider

Click on the graph at right to
see how rapidly George's contract would rise in value if it kept
up the same value in the years ahead.

George is even raising the prospect that Aviva's massive
potential liabilities from the contract in future years could
affect its
merger with Friends Life.

"Obviously customers and Friends Life shareholders might well
face a problem because today they are investing in Friends Life
where all the risks are fully known and tomorrow they will own
shares in Aviva," he said in an interview via email.

Aviva France says the contracts will not affect its solvency,
insisting that the idea the liabilities could run into the
billions are "whimsical and excessive," or "fantaisistes et
excessifs." The
March press release sent out by Aviva also suggests that the
contract owners are trying to put pressure on the company so that
they can negotiate higher compensation in legal
proceedings.

Aviva refused to comment on any of the specific issues raised but
provided Business Insider with this short statement: "Aviva
France has been managing this issue for over a decade. It's not
new. The excessive sums being mentioned are speculative and
without foundation. Aviva France remains appropriately
provisioned and its reserves are reviewed annually with the
French regulator."

We spoke toGeorge about his nearly unbelievable
contract and his battle with Aviva. A lightly edited version of
the transcript is below.

Business Insider: Have you managed to avoid any
major market crashes? In 2008, for example?

Max-Hervé
George:It is not possible to lose, as the
possibility to go back a week in time is in my favour. I can
position my funds into the Aviva equivalent of a money market
fund so I can wait or see what happens and make a trade knowing
what will have happened.

BI:Did your father ever explain
why he didn't agree to sign up to a different contract while the
vast majority of other holders did?

MHG:Of course, my father refused to sign the
amendments proposed by the company. Some other contract holders
did agree to sign, but my lawyer, Nicolas Lecoq-Vallon, has
persuaded the courts that most of these amendments were
"fraudulent" by being "misleading" and has thus managed to
invalidate them.

BI: Do you know anyone else, apart from your own
family, with the same or similar asset?

MHG:A minimum of 30 people are now in
litigation against the company and tens of thousands of contracts
are likely still to be "out there." One never knows, but it might
be expected that the publicity will wake some of the contract
holders up to what they still have, as every day Nicolas
Lecoq-Vallon receives enquiries from new clients.

BI: How long do you expect the contract to last
— until Aviva can no longer pay? Do you expect to become a
billionaire?

MHG:I can't really answer that question as it
is not whether I might become a "billionaire" as you ask, but
rather when will the fifth-largest insurer, with over 38 million
customers worldwide, honour the contract I have and stop
violating the judgement of France's highest court.

The contract can and will run
until I die — but I should point out that I'm only 25.

The real question therefore is
how can an insurer like Aviva, a company entrusted with millions
of peoples' savings, listed on several stock exchanges around the
world in places such as New York, London, and Frankfurt, fail to
respect its contractual commitments?

BI: What do
you think of the people who initially drew up and offered these
contracts?

MHG: The managers who were responsible for
introducing these contracts were quite often the very people who
also took advantage of them and signed themselves up to them.
They knew very well they were signing themselves up to their own
gold-plated pensions.